The Expert Podcast

…So interest rates have spiked up. Six seven maybe 8%. The home prices have gone up to where people can't afford the selling prices anymore. And even the supply chain issues have created cost of goods that are higher things like paint and lumber and everything else So what are builders doing because of this Well, It's real simple. Builders are putting on the brakes for new single family home construction. And likely to extend it to 23 This is from ABC news. Right…Multiple news outlets and financial analysts have come out with this showing that. Builders are basically saying look, we don't know if we're ever going to sell these houses These prices are too high. The interest rate's too high Nobody's buying people are canceling their existing contracts. So let's stop building houses, fewer homes being built. So you might think well that's a good thing. It'll help the housing market. Well, maybe not. How is building less houses going to help the housing market. If you're a home buyer. And you love to see builders running into trouble. You might think well it's going to get me a better deal on the house It's not there Cost is still the same. You might think well maybe if there's less new houses on the market, People that are less new houses selling people that are selling their resale home will give me a better deal. That's not going to happen either because there's that result less houses on the market. And if it extends into to…That means there's going to be fewer homes for sale in 2020 3, 24, 25 And so on interest rates aren't going to be coming back down to three or 4% anytime soon In fact, The article that the wall street journal had the other day said that pro prime rates are gonna go up to five or six which will push mortgage rates up to eight or nine. We're already seeing some nonstandard mortgage programs at the nine to 10% range. So this fewer homes being built. thing. Is going to be a domino effect a ripple effect in the marketplace for years to come. There's already a shortage of homes. For buyers as you know…That's this is going to make it worse. You have to build a certain number of houses every year to keep the housing market I fulfilled to keep it flush. Look. For the last 10 years there's never been a time that there's too many houses for sale. There's always a housing shortage even now where there's less buyers out there. There's also less sellers. Yeah there's more houses for sale right now in 2022 than there were two years ago in 2020. But there's still not enough. If you're a buyer. It's not like…you're finding easy houses to buy The prices are too high and they're still not great inventory. We monitor it in a couple of different markets and yeah there's more houses but they're all kind of. How should I say junky little houses. They need work. They got problems They're not great Lots. The nice houses aren't out there. People with nice houses are keeping them cause they have a low mortgage. And they can't replace it. Builders constructing viewer home single family homes. Is not a good thing for the future of the housing market. It's just going to keep the price high. Even with interest rates high. Tell us what your thoughts are in the comments.